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Which of the following statements is TRUE regarding activity-based costing systems

Which of the following statements is TRUE regarding activity-based costing systems?

A) ABC systems accumulate overhead costs by departments.

B) ABC costing systems are less complex and, therefore, less costly than traditional systems.

C) ABC costing systems can be used in manufacturing firms only.

D) ABC costing systems have separate indirect cost allocation rates for each activity.

37) Activity-based costing considers ________ to be the fundamental cost object.

A) activities

B) direct labor hours

C) direct materials

D) finished goods

38) Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$1.25 per part

Machining

Machine hours

$2.50 per machine hour

Assembling

Number of parts

$0.50 per part

Packaging

Number of finished units

$1.50 per finished unit

 

What is the cost of materials handling per cuckoo clock?

A) $3.00

B) $5.00

C) $4.50

D) $12.50

39) Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$1.25 per part

Machining

Machine hours

$2.50 per machine hour

Assembling

Number of parts

$0.50 per part

Packaging

Number of finished units

$1.50 per finished unit

 

What is the cost of machining per cuckoo clock?

A) $5.00

B) $3.00

C) $10.50

D) $25.00

40) Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$1.25 per part

Machining

Machine hours

$2.50 per machine hour

Assembling

Number of parts

$0.50 per part

Packaging

Number of finished units

$1.50 per finished unit

 

What is the cost of assembling per cuckoo clock?

A) $4.50

B) $12.50

C) $5.00

D) $3.00

41) Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$1.25 per part

Machining

Machine hours

$2.50 per machine hour

Assembling

Number of parts

$0.50 per part

Packaging

Number of finished units

$1.50 per finished unit

 

What is the number of finished cuckoo clocks?

A) 20

B) 100

C) 250

D) Cannot be determined from the information given

42) Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$1.25 per part

Machining

Machine hours

$2.50 per machine hour

Assembling

Number of parts

$0.50 per part

Packaging

Number of finished units

$1.50 per finished unit

 

What is the total manufacturing cost per cuckoo clock?

A) $142.50

B) $24.00

C) $144.00

D) $25.00

43) Electronics Unlimited uses activity-based costing to allocate all manufacturing conversion costs. Electronics Unlimited produces computer keyboards; each computer keyboard has $8.00 of direct materials, includes 12 parts and requires 1/2 hour of machine time. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$.25 per part

Machining

Machine hours

$12.00 per machine hour

Assembling

Number of parts

$1.00 per part

Packaging

Number of finished units

$1.75 per finished unit

 

What is the cost of materials handling per computer keyboard?

A) $0.88

B) $15.00

C) $6.00

D) $12.00

44) Electronics Unlimited uses activity-based costing to allocate all manufacturing conversion costs. Electronics Unlimited produces computer keyboards; each computer keyboard has $8.00 of direct materials, includes 12 parts and requires 1/2 hour of machine time. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$.25 per part

Machining

Machine hours

$12.00 per machine hour

Assembling

Number of parts

$1.00 per part

Packaging

Number of finished units

$1.75 per finished unit

 

What is the cost of machining per computer keyboard?

A) $0.88

B) $12.00

C) $6.00

D) $3.00

45) Electronics Unlimited uses activity-based costing to allocate all manufacturing conversion costs. Electronics Unlimited produces computer keyboards; each computer keyboard has $8.00 of direct materials, includes 12 parts and requires 1/2 hour of machine time. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$.25 per part

Machining

Machine hours

$12.00 per machine hour

Assembling

Number of parts

$1.00 per part

Packaging

Number of finished units

$1.75 per finished unit

 

What is the cost of assembling per computer keyboard?

A) $6.00

B) $12.00

C) $3.00

D) $0.88

Jan 27 2020 View more View Less

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